Lean Business, Fat Profits

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Brought to you by Lean Business, Fat Profits Harnessing Lean principles across all areas of business reduces waste, increases productivity and produces really FAT profits

Transcript of Lean Business, Fat Profits

Page 1: Lean Business, Fat Profits

Brought  to  you  by  

Lean Business, Fat Profits Harnessing Lean principles across all areas of business reduces waste, increases productivity and produces really FAT profits

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Meet your presenters

•  Wayne Moloney, Founding Partner -  Wayne is a business strategist with a passion for sales

and business development, helping businesses grow through developing and implementing sound strategic initiatives.

•  Mike Karle, Partner -  Mike’s specialty is helping businesses get the most out

of their processes. Through strategic manufacturing processes, Lean and ERP implementation, Mike has helped businesses improve efficiencies and most importantly, profits.

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What is Lean?

A strategic initiative to: •  Increase and improve CUSTOMER VALUE •  Reduce or eliminate those activities

(costs) that add NO CUSTOMER VALUE ie WASTE

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Lean impacts ALL departments

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The Purpose of Lean….

The purpose of Lean is to increase capacity by designing the operational

processes so that they optimally respond to customer demand, and then to utilise the additional capacity to add greater

customer value and/or increase output.

Cost reduction is a natural consequence

of Lean, but not its purpose.

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Important Lean Characteristics

●  Focus on the Customer - what does he really want? ●  Simplicity - use simple systems & procedures ●  Visibility - make systems and measurements visible to all ●  Flow & Regularity - keep operations moving. “If it stands

still, it cannot add value and must therefore be waste!” ●  Participation & Knowledge - all employees are involved ●  IT - Use IT to streamline operations ●  Continual Improvement - Lean is not a “one-off” project

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Lean – where to start?

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What is Customer Value?

You cannot improve the process (remove waste) if you do not know what the customer values from the

process.

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Values Desired by the Customer

•  Price •  Quality •  Communication (type, speed, documentation etc)

•  Packaging & Labeling

•  Flexibility (Design, Delivery, Payment terms)

•  Technical Support & After Sales Service

•  Environmental Policy or Credentials

•  Customer Experience & Emotion – “Feel Good”

All the benefits vs sacrifices (not just money)

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What is ‘Waste’ or ‘Non-Value’?

“Waste” is all Non-Value Added Effort …..

i.e. any activity that your Customer is not prepared to pay for

…….but often has to!

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Business Processes

•  Value Added (what the customer will pay for) •  Non-Value Added (waste) •  Necessary Non-Value Added

How can we improve the customer’s experience

by reducing the time from order to delivery?

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Analyse each Process….

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Eliminate the Non-Value Added effort

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Create greater Value for the Customer

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Typical Wastes

•  Transport •  Inventory •  Waiting •  Scrap, Mistakes, Errors, Misunderstanding or Lack of

Knowledge •  Inappropriate processes and systems – wrong tool for the

job •  Sorting & Searching •  Duplication

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Typical Wastes

•  Inappropriate Measurement (measures drive behavior) •  Under-load & Over-load (e.g. month-end, year-end) •  Inappropriate Priorities •  Inappropriate Frequencies & Presence (meetings, reports, etc) •  Interference (emails, people, Facebook, Twitter etc) •  Over-design and sub-optimisation (what does the customer

really want?)

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Wage a War on Waste •  Are we using metrics that will allow us to improve the

process or add customer value?

•  Why do these tasks result in scrap components or process errors?

•  How can we eliminate or reduce the processing errors?

•  Can we eliminate duplicated information by improved IT systems?

•  Is this task actually adding customer value?

•  Are we giving the customer what he really wants or only what is available? “We know what the customer wants!”

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Wage a War on Waste •  Is this report necessary, who uses it and for what purpose?

•  Why are these good/documents/tools being stored here?

•  Why is this task necessary and why is it being done by this person/department?

•  Can we rearrange the physical layout of the office, shop, department, operating theater or factory to reduce movement and facilitate flow?

•  Can we simplify, eliminate or combine this task with another?

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Lean in Business

•  Lean is NOT just about manufacturing •  Lean can and should be the way you think

about business - ALL aspects of your business

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Leading Lean Lean Leaders…

•  Know how the business serves the customer

•  Build ability in their people

•  Show a continuous improvement mindset

•  Focus on process and results, and demonstrate an understanding of the value stream

•  Create a culture to sustain improvement

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